Importance of Export Pricing

Importance of Export Pricing

An exporter intends to achieve the following objective through his pricing strategy:

(a) Helps to Achieve Objectives: Every organization has some fundamental objectives, such as sales maximization, profit maximization and so on Pricing helps organizations in achieving these objectives by suitably modifying their pricing strategy.

(b) Increases Profitability: Pricing decisions directly affect the sales revenue and thereby overall profitability. For example, low pricing helps market penetration but reduces revenue. On the other hand, skimming pricing generates more revenue, if demand conditions are favourable.

(c) Helps to Penetrate the Market: When there is an intense competition in the market, low pricing helps to penetrate market by driving away competitors. Low pricing attracts consumers and thereby helps in increasing market share for the product.

(d) Helps to Skim the Cream: Where there exist a considerable consumer surplus, the same can be skimmed by introducing innovative features in the product or altogether new products in the market. Thus, a suitable price research can generate additional revenue for the exporter in the international market.

(e) Helps to Increase Market Share: Exporters can increase market share for their product by charging competitive price in the international markets. Low price is one of the important considerations that affect the buying decisions of the consumers.

(f) Helps to Develop Brand Loyalty: Goods, which are sold at right and reasonable price, help to develop brand loyalty in the long run. Consumers continue to buy such products even if new entrants, selling goods at lower price, enter the market.

(g) Helps to Face Competition: Exporters face competition from three angles sellers from his own country, from other countries and domestic suppliers in importing country. Thus, exporters should fix up such a price, which should be reasonable and, as far as possible, final and non-negotiable.

(h) Reflects the Quality of Product: Generally, consumers correlate quality of product with its price. Low priced products reflect low quality and vice versa. Hence, exporters should avoid charging a very low price. At the same time, very high prices are also to be avoided.

 

 

 

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Comments


carol lilly: Please could you give me some rough idea of how much a Phytosanitary Certificate PPQ Form 577 for a small/med box of plumeria tree cuttings would be being sent to Britain from Florida US. I need to work out if a seller may be upping the price. Thank you Carol Lilly

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